T-Mobile charges for extra data on 500MB plans, but it's not an "overage" fee.

T-Mobile US CEO John Legere today said that data overage fees are greedy and predatory and that the company plans to stop charging them.

Legere today also launched a Change.org petition calling on AT&T, Verizon, and Sprint to eliminate overage charges—despite the fact that T-Mobile plans to continue charging entry-level customers for extra data.

Just last week, T-Mobile announced a Simple Starter plan for $40 a month, which includes unlimited talk and text and up to 500MB of 4G data with "no data overage charges."

Hitting the 500MB cap without buying more bits results in data services being turned off. After a user hits the cap, "the service is suspended, with the peace of mind that no overage fees will apply," T-Mobile said. To get additional data, customers have to pay for "on-demand data passes." The company doesn't call that an "overage" fee since it doesn't get billed automatically.

"It is not automatic, and it’s not a surprise," a T-Mobile spokesperson told Ars. "There are still scenarios where customers may add on additional services—e.g. pay-per-use plans and international toll calling or roaming (in non-Simple Global countries)."

The extra data passes cost $5 for one day with up to 500MB of high-speed data or $10 for one week with up to 1GB. The charges go up for international data. One day with 100MB internationally is $15, one week with 200MB is $25, and two weeks with 500MB is $50. (T-Mobile offers free international data roaming for Simple Choice plans, but with speeds of only 128Kbps. The free international roaming isn't available on the new Simple Starter plans.)

Verizon Wireless's overage charge for 1GB is $10, which lasts the rest of the month after a user goes over the limit. Verizon sends out warnings to consumers before they hit their limit.

Nothing much changed for most T-Mobile customers today, who see their speeds throttled when they pass their data limits. Customers on some older plans have been paying overage charges to T-Mobile right up until this month, but in the future they will be throttled instead unless they choose to pay for additional high-speed data.

CEO: The fees we charged until today were “predatory”

T-Mobile's Simple Choice plans start at $50 a month for 1GB of data and unlimited talk and text. There are no automatic fees for using data after that first gigabyte, but the speed is dropped from 4G to 2G unless the customer chooses to pay for extra 4G data.

In last week's announcement of the lower-cost Simple Starter plan, T-Mobile CEO John Legere said, "We are freeing consumers from the predatory practices of traditional US wireless companies, and that includes these plans that start with a low price and a low data limit but then hit you with insane fees if you send one too many e-mails."

In today's announcement, Legere said that "charging overage fees is a greedy, predatory practice that needs to go."

While T-Mobile began throttling data speeds instead of charging overage fees several years ago, the carrier decided to reinstate overage fees for a 200MB plan in August 2011. “Customers will incur overages of $0.10 per MB when they exceed 200MB of data ($10 for 100MB) up to a maximum monthly payment of $40 with both Value and Classic plans for data including the 200MB add-on fee,” T-Mobile said at the time, according to AllthingsD.

T-Mobile's move today to stop charging overage fees "primarily affects our customers who are on older plans," the T-Mobile spokesperson told Ars. The company says it estimates that 20 million Americans were charged more than $1 billion in overage fees by wireless companies last year, but it refused to say how many of those people were charged the fees by T-Mobile.

In October last year, a letter from T-Mobile showed that it was moving customers off older plans and selecting new ones for them. "With this plan, you may pay more for your service, but you'll continue to enjoy access to the latest smartphones and T-Mobile's advanced nationwide 4G network with LTE, rolling out in 2013," the letter published by TmoNews said. Customers were given until February 2014 to cancel service without penalty.

Any customers who weren't automatically moved to new plans will stop seeing data overage fees next month, Legere wrote today. "Starting in May for bills arriving in June—regardless of whether you're on Simple Choice, Simple Starter, or an older plan, we're abolishing overages for good. Period," he wrote.

Voice minutes and texts are generally unlimited on T-Mobile plans, with the exception of pay-as-you-go plans.

It’s not an ad

Legere's Change.org petition calls on "AT&T, Verizon, and Sprint to follow T-Mobile’s lead and abolish these overages once and for all." It's not the first time Change.org has been used to call on technology companies to alter their policies—one such petition asked Google to change its YouTube commenting system—but generally the petitions aren't launched by a company seeking to convince customers that it's better than its rivals.

"They support the change we’re trying to bring to the industry and tweeted out our petition this morning," T-Mobile said. "We see the petition differently [than an ad]. We’re starting a movement to change this industry for the better. We’re not—in any way—asking people on Change.org to use our services. We’re asking them to demand better of the US wireless industry."

A Change.org spokesperson told Ars that the website "is an open platform where anyone, including an organization, elected official, or even CEO can start a petition about absolutely anything they care about. We often see companies start petitions about issues they believe are in the public interest, and we’ve found that many of our users are passionate about consumer rights issues."

Promoted Comments

Verizons deal still seems better given it lasts the rest of the month.

I think everyone would agree with you if it was an opt-in.

The problem with the way the current system works is that notification isn't all that timely. For instance, VZW has $25/100MB international plans. You plug your phone into your laptop while traveling without realizing tethering is on. Hotel WiFi drops in the night and switches to USB tethering. Windows decides to update.

$200 later, it's pretty irritating that they just send you a txt and there's no way to request they shut data off until you explicitly ask it be turned back on.

Via agreements with AT&T, they have roaming for voice and SMS, but data roaming (which includes MMS) is extremely limited. For those constantly on the road (such as myself), this is a major issue and is the ONLY thing that kept me from going to T-Mobile. I use data FAR more than anything else and I need it no matter where I am on the road. Straight Talk on AT&T or Verizon towers still seems the best deal for my usage case, but I'd love to be proven wrong.

Verizons deal still seems better given it lasts the rest of the month.

I think everyone would agree with you if it was an opt-in.

The problem with the way the current system works is that notification isn't all that timely. For instance, VZW has $25/100MB international plans. You plug your phone into your laptop while traveling without realizing tethering is on. Hotel WiFi drops in the night and switches to USB tethering. Windows decides to update.

$200 later, it's pretty irritating that they just send you a txt and there's no way to request they shut data off until you explicitly ask it be turned back on.

If they were truly sorry, they'd take everyone with an overage charge in the last 12 months and apply a credit to their bills. Otherwise this is a pretty cynical publicity stunt.

Oh for goodness sake. Deciding to eliminate them going forward seems like more than just a publicity stunt, and offering a retroactive refund over the last twelve months would play absolute havoc with their financials. They're doing the right thing, but they're rolling out these changes slowly in order to, yes, get some publicity. That's how they get customers, make money, and prove the validity of the business model.

I just switched to Tmob 4 months ago from the truly unlimited data plan from att. I just can;t figure out why people need so much data using a 4 inch screen. What is so important on the net that you can;t wait until you get home or on a free wifi hotspot. I have been a network engineer for 15 years and I haven't seen anything that I couldn't wait to watch until I got home. I guess maybe I am missing something that other see but it still leaves me scratching my head.

Why anyone still charges by the text message sent or received is beyond me. It represents the smallest package of data in actual bits that is humanly meaningful. Voice, pictures, video, webpages, downloads, and email are all much more data intensive. At this point I would think that texting should pretty much be a free public service.

VZW charges different overages depending on what plan you're on. The More Everything plans are $10/gb; but their single line plans are $15 for 500mb on the 1gb plan and $15/1gb on the 2gb one. IIRC they've got a semi-hidden, even cheaper plan with less monthly data and even higher overage rates if you go ever, but a 2 minute look today didn't find it.

Why anyone still charges by the text message sent or received is beyond me. It represents the smallest package of data in actual bits that is humanly meaningful. Voice, pictures, video, webpages, downloads, and email are all much more data intensive. At this point I would think that texting should pretty much be a free public service.

They charge because it's a license to print money.

It's slowly changing as more plans are offering unlimited voice/texts for a flat fee; and competitive pressure will hopefully continue to push it down just like it has over prior years (A decade ago unlimited voice would cost ~80-100 for a single line).

So data caps aren't going away, right? It's just the manner in which they charge you for going over a completely arbitrary cap that has no bearing on network congestion or how much data you decide to use? Okay, good, I was worried for a second that something would actually change for the better.

Via agreements with AT&T, they have roaming for voice and SMS, but data roaming (which includes MMS) is extremely limited. For those constantly on the road (such as myself), this is a major issue and is the ONLY thing that kept me from going to T-Mobile. I use data FAR more than anything else and I need it no matter where I am on the road. Straight Talk on AT&T or Verizon towers still seems the best deal for my usage case, but I'd love to be proven wrong.

My (non-US) PAYG provider seems fairer than anything mentioned here: I pay for "X" MB of data at "Y" speed (various options for the X & Y values), and when that runs out if I've preloaded enough credit it renews another hit of the same, or else it drops back to endless 56kB (and boy does that feel ENDLESS :-) ). So no overage fee and I can still limp along until I'm sufficiently exasperated to re-open the wallet. And since it's PAYG I don't have to commit to the X & Y - in principle this poses risk to the provider that I'm not "locked in" and might reduce those numbers or go elsewhere but in practice I'm happy, and every month I end up using just a little more... So they make both money and happy customers :-)

Question for the long-term: what will it take for cell networks to be considered utilities? Already there is a higher percentage of the adult population in the US in poverty than there are non-mobile users. As of last year 91% of all adults in the US owned a cell phone.

Verizons deal still seems better given it lasts the rest of the month.

I think everyone would agree with you if it was an opt-in.

The problem with the way the current system works is that notification isn't all that timely. For instance, VZW has $25/100MB international plans. You plug your phone into your laptop while traveling without realizing tethering is on. Hotel WiFi drops in the night and switches to USB tethering. Windows decides to update.

$200 later, it's pretty irritating that they just send you a txt and there's no way to request they shut data off until you explicitly ask it be turned back on.

Why anyone still charges by the text message sent or received is beyond me. It represents the smallest package of data in actual bits that is humanly meaningful. Voice, pictures, video, webpages, downloads, and email are all much more data intensive. At this point I would think that texting should pretty much be a free public service.

While I agree for the most part, there are some MVNOs that charge so little that it makes sense to go with them anyway. Ting, for example, charges by usage and a family of four can have a total bill of just $50/mo with moderate (and intelligent, e.g. VoIP) usage - that would include 500 mins, 1K texts, and 500MB (with LTE coverage, no less). Even less, if they're really aggressive about it. It uses Sprint's network, but roams onto Verizon at no extra charge for voice and SMS so you're almost never fully out of touch.

Via agreements with AT&T, they have roaming for voice and SMS, but data roaming (which includes MMS) is extremely limited. For those constantly on the road (such as myself), this is a major issue and is the ONLY thing that kept me from going to T-Mobile. I use data FAR more than anything else and I need it no matter where I am on the road. Straight Talk on AT&T or Verizon towers still seems the best deal for my usage case, but I'd love to be proven wrong.

Go to CES, NAB, Defcon, or any Vegas event. Head north to pay homage to the famed Area 51. You will have AT&T coverage right up to the ET Highway. You will have no TMobile coverage once you leave I-15 for route 93. Some of the AT&T towers have been there for 4 years. Hey, even voice would be a start. There is no T-Mobile coverage over a route lots of geeks make.

In most rural areas, T-mobile coverage is over EDGE on lesser known carriers like USA Comnet. I'm glad for the service, but in the same area AT&T is already 4g.

I suggest after crashing the AT&T party as CES next year, make a loop along route 93, 375, 6, and then 95 back to Vegas. Route 93 and 95 will have At least 3G or 4g service. Verizon will cover the 93, 95, 6, and parts of 375. All T-mobile will have is EDGE on 3rd tier carriers along route 95.

I'd like them to work harder. Apparently my gf's family is in that 4%, because when I visit, they get AT&T coverage but i get no service on T-mobile. Well, not no... I occasionally if i hold my phone up and stand very still can get a 1 minute phone call.. though usually when it says service, i lose service in the attempt to call and it never even rings. Going to spend the summer with her family, so i'm basically going to be paying for non-service.

I care less about 4G when I can't even place a call. Of course, when in metro areas have great service.

If they were truly sorry, they'd take everyone with an overage charge in the last 12 months and apply a credit to their bills. Otherwise this is a pretty cynical publicity stunt.

Oh for goodness sake. Deciding to eliminate them going forward seems like more than just a publicity stunt, and offering a retroactive refund over the last twelve months would play absolute havoc with their financials. They're doing the right thing, but they're rolling out these changes slowly in order to, yes, get some publicity. That's how they get customers, make money, and prove the validity of the business model.

I don't know. When a class action suit pops up to confront tmobile based on their CEO saying they had previously used predatory pricing and we're robbing their customers, that viewpoint might change.

This guy strikes me as a loud blustering loud mouth full of crap. Every time he launches into one of his tirades his solution is equivalent to other options yet he acts like he has invented the sun. He comes off as a snake oil salesman.

I am so fucking confused by this. I have had Tmo for three years now. About 16 months ago, they took away my unlimited data plan, but they also promised not to charge me if I went over the 2gigs I was willing to pay for; instead, they would throttle my speed.

So now they are repeating this deal? Did it change back sometime in the past 1.4 years?

I've gone over my data 'cap,' but I have never seen extra charges. I don't get it.

Via agreements with AT&T, they have roaming for voice and SMS, but data roaming (which includes MMS) is extremely limited. For those constantly on the road (such as myself), this is a major issue and is the ONLY thing that kept me from going to T-Mobile. I use data FAR more than anything else and I need it no matter where I am on the road. Straight Talk on AT&T or Verizon towers still seems the best deal for my usage case, but I'd love to be proven wrong.

Go to CES, NAB, Defcon, or any Vegas event. Head north to pay homage to the famed Area 51. You will have AT&T coverage right up to the ET Highway. You will have no TMobile coverage once you leave I-15 for route 93. Some of the AT&T towers have been there for 4 years. Hey, even voice would be a start. There is no T-Mobile coverage over a route lots of geeks make.

In most rural areas, T-mobile coverage is over EDGE on lesser known carriers like USA Comnet. I'm glad for the service, but in the same area AT&T is already 4g.

I suggest after crashing the AT&T party as CES next year, make a loop along route 93, 375, 6, and then 95 back to Vegas. Route 93 and 95 will have At least 3G or 4g service. Verizon will cover the 93, 95, 6, and parts of 375. All T-mobile will have is EDGE on 3rd tier carriers along route 95.

Yep, exactly my problem. Heck, I'd even put up with EDGE roaming if I had to as long as it was consistent and almost everywhere. I'm not looking to stream anything, I just need access. Slow speed is still far better than NO speed.

I just switched to Tmob 4 months ago from the truly unlimited data plan from att. I just can;t figure out why people need so much data using a 4 inch screen. What is so important on the net that you can;t wait until you get home or on a free wifi hotspot. I have been a network engineer for 15 years and I haven't seen anything that I couldn't wait to watch until I got home. I guess maybe I am missing something that other see but it still leaves me scratching my head.

So your argument here is basically that no one needs internet on the go anyway?

I would take issue with this. It's 2014. Why should I wait to get home to do something when I have a powerful internet-enabled computer in my pocket? For me this question belongs in the same category as "why write an email when you could mail a letter?"

In addition, if you travel a lot, your phone is often your only source of internet access (this includes tethering.)

Furthermore, public wifi seems to be getting almost universally terrible of late as cellular networks get better. I currently work remotely full-time, and I've basically given up on public wifi networks. If I'm working somewhere in public and there's wifi, I pretty much always still tether myphone. The public networks are always incredibly slow and highly unreliable. Half the time the public connection is so unstable I can't even keep my VPN connected.

There are tons of reasons one would use a lot of cellular data, and that usage is just going to increase over time.

Question for the long-term: what will it take for cell networks to be considered utilities? Already there is a higher percentage of the adult population in the US in poverty than there are non-mobile users. As of last year 91% of all adults in the US owned a cell phone.

It will take a level of political activism that I don't think we've seen before, one that I think would have to eclipse the SOPA/PIPA uproar.

You must understand that providing services in a natural monopoly setting is incredibly lucrative. When you have no choices as a consumer, you... have no choices. You can't go to a competitor that has a better price, you can't patronize a certain utility, whoops, I mean carrier (Freudian slip) if you like their customer service better, you have nothing. This doesn't only mean that you don't get your way, this means that you can be flat out taken advantage of. Some carriers charge $0.50 per text message over your limit. If you assume text messages are 137B (1120 bits is the specification size), then they're effectively charging you $3.6 million dollars per GB of traffic you're adding to their network. ($.50/137B = $0.0036/B, * 1,000,000,000B per GB).

Natural monopolies are service industires where having a single provider of goods or services is the most efficient model of distribution. Indeed, with the costs of building infrastructure (laying cable, building towers, etc), ISPs and carriers fall into this category. Interestingly enough, so do power and water, which is why many places in the US regulate these utilities to prevent consumer abuse. I suppose you can't live without running water (like human beings have been for the past tens of thousands of years, up until just a few centuries ago) and it's certainly not possible to live without power (like many people did again for tens of thousands of years until just a century or two ago), but it's definitely possible and completely plausible that someone could go without an Internet connection or mobile telephone service. You don't need it so you can get taken advantage of for using it, or so the law currently allows.

So the TL;DR? What do we need to do to get these clowns regulated? Basically take away their hundreds of billions of dollars of net profit that they get annually. Good luck with that. This is why I estimate you're going to need a political activism campaign bigger than the SOPA/PIPA support we saw. SOPA was an arguably flawed bill introduced by an elected official that there was almost unanimous support against. ISPs and carriers being unregulated is not new, but it doesn't seem to light peoples' fires the same way SOPA did. Plus, you have to remember that as soon as we threaten their profit, the lobbyists will come out in droves (as they did to support Comcast's acquisition of TWC) to keep the status quo.

The big ISPs and carrier (and their shareholders) win, and everyone else loses. As long as we have a political system that only forbids flat out quid-quo-pro bribery, this will not change until the people have as much money as the ISPs and carriers.

Okay, I will say this for T-Mobile, despite my previous negative post for service in an area about 1/4 mile off the highway but out in the country (5 minutes from town), they did bump their old plans up.

Because of this article I just checked. I was on their $50 500MB 4g (unlimited 2g after that) plan, and I just checked and it was bumped up to 1GB 4g with unlimited 2g/edge as the article describes. I do appreciate the upgrade. I rarely use 500MB per month since i'm always on wifi, so I would consider bumping down to the new $40 plan, but I like having the unlimited slower data option should I go over. Thats why I was kind of curious about this article, I was on their '500MB' plan and didn't recall it being an overage possibility. Was supposed to be unlimited. Must have been a lower plan option or from them introducing this new option.

While I'm on vacation I will leave plan as is, but I may downgrade when I get back since I use so little data. (also I know best not to tell people you're on vacation, but I also have plenty of roommates, not like house will be empty).

Edit: Ahh, but they replaced their $70 unlimited plan with 5GB data, and moved their unlimited to $80. So guess good for lower plans but more expensive for higher data plans. Guess that is their plan to deal with cheaper $40 plan being added. $10 less for cheapest plan, but $10 more for most expensive, and cheapest is capped, not even unlimited 2g/edge, having to pay extra if need more than 500MB limit.

When John Legere becomes the CEO of T-Mobile Worldwide you can ask him.

They already do this sort of think in the UK. If you exceed the data on your EE (the T-Mobile/Orange owned 4G brand) you're left looking at an "out of data" page, not automatically charged. Same for roaming data.

This guy strikes me as a loud blustering loud mouth full of crap. Every time he launches into one of his tirades his solution is equivalent to other options yet he acts like he has invented the sun. He comes off as a snake oil salesman.

Yeah, it's like he can't help being a dick. The Change.org thing is just straight up asshole talk. "Oh, what we were doing yesterday was horrible and predatory. So we're not going to do it anymore. AND we're going to petition our competition to stop doing it too. Because we're just going to pretend that our shit never stunk, so we have the right to wag fingers."

It's like a drunk driver declaring his sobriety, and with the next breath, denouncing everyone else who's driven drunk.

Wow. Add the shorter work weeks there and I'm sold (just need to learn more than the handful of French phrases I know now - don't think "ménage à trois" is going to get me very far). If they've got good healthcare over there, I may just have to talk to the wife about moving. Used to live next door in Germany when I was a kid, so it'd be nice to visit the old stomping grounds.

My (non-US) PAYG provider seems fairer than anything mentioned here: I pay for "X" MB of data at "Y" speed (various options for the X & Y values), and when that runs out if I've preloaded enough credit it renews another hit of the same, or else it drops back to endless 56kB (and boy does that feel ENDLESS :-) ). So no overage fee and I can still limp along until I'm sufficiently exasperated to re-open the wallet. And since it's PAYG I don't have to commit to the X & Y - in principle this poses risk to the provider that I'm not "locked in" and might reduce those numbers or go elsewhere but in practice I'm happy, and every month I end up using just a little more... So they make both money and happy customers :-)

My wife is on one of the best plans available, unlimited talk, text, and 5GB of 3G data for $25/month and it even includes 200MB of roaming per month. Republic Wireless is great.

Why anyone still charges by the text message sent or received is beyond me. It represents the smallest package of data in actual bits that is humanly meaningful. Voice, pictures, video, webpages, downloads, and email are all much more data intensive. At this point I would think that texting should pretty much be a free public service.

Actually, text messages are not sent along normal data channels. Ever wonder why the arbitrary character limit is there? It's because text messages are sent along with the normal data your phone uses to keep in touch with the cell tower, called the control channel, in the extra space it has.

MMS are different, and indeed some carriers now only use MMS even for text - but standard text messaging actually doesn't use any of that bandwidth, and thus it's even more ridiculous that services charge by the SMS.

I am so fucking confused by this. I have had Tmo for three years now. About 16 months ago, they took away my unlimited data plan, but they also promised not to charge me if I went over the 2gigs I was willing to pay for; instead, they would throttle my speed.

So now they are repeating this deal? Did it change back sometime in the past 1.4 years?

I've gone over my data 'cap,' but I have never seen extra charges. I don't get it.

From what I understand, nothing will change for you. Youre just on their new "unlimited" plan. There are some who are paying overages due to their particular plan, and those overages will now be opt-in instead of opt-out.